Not for release, publication or distribution, in whole or in part, in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.
FOR IMMEDIATE RELEASE
11 November 2015
RECOMMENDED CASH ACQUISITION
of
ENERGY TECHNIQUE PLC
by
VOLUTION GROUP PLC
to be effected by
a Scheme of Arrangement under Part 26 of the Companies Act 2006
Summary
The boards of directors of Volution Group plc ("Volution") and Energy Technique plc ("ETQ") are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash acquisition by which the entire issued and to be issued share capital of ETQ will be acquired by Volution.
Under the terms of the Acquisition, each Scheme Shareholder will receive 345 pence in cash for each Scheme Share.
The price of 345 pence per Scheme Share represents a premium of approximately:
· 18.9 per cent. to the volume-weighted average ETQ share price of 290 pence for the twelve-month period ended 25 February 2015 (being the last business day prior to the commencement of the Offer Period); and
· 10.4 per cent. to the closing ETQ share price of 312.5 pence on 25 February 2015 (being the last business day prior to the commencement of the Offer Period).
The Acquisition values ETQ's existing issued and to be issued ordinary share capital (assuming full exercise of options granted under the ETQ Share Scheme) at approximately £9.25 million on a fully diluted basis.
It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
The ETQ Directors, who have been so advised by Cavendish as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Cavendish has taken into account the commercial assessments of the ETQ Directors.
Accordingly, the ETQ Directors have unanimously approved the Acquisition and intend to recommend that ETQ Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting as they have irrevocably undertaken to do in respect of their own beneficial holdings of, in aggregate, 408,340 issued ETQ Shares representing approximately 17.08 per cent. of the existing issued ordinary share capital of ETQ on 10 November 2015 (being the last business day prior to the date of this announcement).
In addition to the irrevocable undertakings from the ETQ Directors, Volution has also received irrevocable undertakings from each of Peter Gyllenhammar, James Lugg, John Cawthorne and Danny Francis to vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting in respect of their own beneficial holdings of, in aggregate, 1,173,227 ETQ Shares, representing approximately 49.08 per cent. of the existing issued ordinary share capital of ETQ on 10 November 2015 (being the last business day prior to the date of this announcement) and irrevocable undertakings from the ETQ Directors and Gordon Winter to vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting in respect of their own beneficial holdings of, in aggregate, 199,831 ETQ Shares which are the subject of the ETQ Share Scheme, to the extent that these options are exercised.
The irrevocable undertakings from the ETQ Directors, Peter Gyllenhammar, James Lugg, John Cawthorne, Danny Francis and Gordon Winter will cease to be binding only if the Scheme or Offer lapses or is withdrawn and no new, revised or replacement Scheme or Offer is announced in accordance with Rule 2.7 of the Code, in its place or is announced, in accordance with Rule 2.7 of the Code, at the same time. The undertakings will remain binding in the event that a higher competing offer for ETQ is made.
Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.
Volution has therefore received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of, in aggregate, 1,581,567 ETQ Shares representing, in aggregate, approximately 66.16 per cent. of the existing issued ordinary share capital of ETQ on 10 November 2015 (being the last business day prior to the date of this announcement) and 199,831 ETQ Shares which are the subject of the ETQ Share Scheme.
It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be posted to ETQ Shareholders and (for information only) participants in the Share Scheme as soon as practicable and, in any event, within 28 days of this announcement (unless the Panel agrees otherwise). It is anticipated that the Acquisition will complete by the end of 2015.
Commenting on this announcement, Ronnie George, CEO of Volution Group plc, said:
"We are delighted to have received the ETQ board's unanimous recommendation of our offer. This proposed acquisition is consistent with our stated strategy of making disciplined and value enhancing acquisitions. We believe that ETQ has a strong presence as a supplier to the UK New Build Commercial market which is highly complementary to our strong position in the UK New Build Residential sector. We are excited by the growth prospects for ETQ and increasing our scale in the Commercial HVAC sector. We believe the acquisition will deliver value for our shareholders and consolidate our position in the UK HVAC market."
Leigh Stimpson, CEO of Energy Technique plc, added:
"Since we began our discussions with the Volution group, it has been evident that there is a compelling fit between the businesses in terms of culture, technology and market opportunity. The ETQ Board is confident that this transaction is great news for our employees and customers alike."
This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including its Appendices). The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1 and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains the sources and bases of certain information contained in this summary and the following announcement. Appendix 3 contains details of the irrevocable undertakings received by Volution. Appendix 4 contains the definitions of certain terms used in this summary and the following announcement.
Enquiries
Volution Group plc
Ronnie George |
+44 (0) 1293 441501 |
Ian Dew |
+44 (0) 1293 441536 |
Liberum Capital Limited (Financial Adviser and Broker to Volution Group plc)
Neil Patel/Richard Bootle |
+44 (0) 20 3100 2222 |
Brunswick (Financial Public Relations Adviser to Volution Group plc)
Energy Technique plc
Leigh Stimpson |
+44 (0) 20 8783 0033 |
Rob Unsworth |
+44 (0) 20 8783 0033 |
Cavendish Corporate Finance LLP (Financial Adviser to Energy Technique plc)
Andrew Jeffs/Philip Barker |
+44 (0) 20 7908 6000 |
finnCap Ltd (Nominated Adviser and Broker to Energy Technique plc)
Ed Frisby/Scott Mathieson |
+44 (0) 20 7220 0500 |
Further information
This announcement is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of ETQ in any jurisdiction in contravention of applicable law. The Acquisition will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Acquisition including details of how to vote in respect of the Scheme. Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis of the information contained in the Scheme Document.
Liberum Capital Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Volution and no‑one else in connection with the Acquisition and will not be responsible to anyone other than Volution for providing the protections afforded to clients of Liberum nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement.
Cavendish Corporate Finance LLP, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for ETQ and no-one else in connection with the Acquisition and will not be responsible to anyone other than ETQ for providing the protections afforded to clients of Cavendish nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement.
finnCap Ltd, which is authorised and regulated in the United Kingdom by the FCA, is acting for ETQ in relation to the matters described in this announcement and is not advising any other person, and accordingly will not be responsible to anyone other than ETQ for providing the protections afforded to clients of finnCap Ltd or for providing advice in relation to the matters described in this announcement.
Overseas jurisdictions
The availability of the Acquisition to ETQ Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to overseas shareholders will be contained in the Scheme Document.
The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purposes of complying with English law, the AIM Rules, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England.
Copies of this announcement and the formal documentation relating to the Scheme and the Acquisition will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction.
US Holders should note that the Acquisition relates to the securities of a UK company, is subject to UK disclosure requirements (which are different from those of the US) and is proposed to be implemented under a scheme of arrangement provided for under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act. Accordingly, the Scheme will be subject to UK disclosure requirements and practices, which are different from the disclosure requirements of the US tender offer and proxy solicitation rules. The financial information included in this announcement and the Scheme documentation has been or will have been prepared in accordance with IFRS and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If Volution exercises its right to implement the acquisition of the ETQ Shares by way of a takeover offer, such offer will be made in compliance with applicable US tender offer and securities laws and regulations.
The receipt of cash pursuant to the Acquisition by a US Holder as consideration for the transfer of its Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each ETQ Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him.
It may be difficult for US Holders to enforce their rights and claims arising out of the US federal securities laws, since Volution and ETQ are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US. US Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Volution or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, ETQ Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service of the London Stock Exchange and will be available on the London Stock Exchange website, www.londonstockexchange.com.
Forward looking statements
This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Volution and ETQ may contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Volution and ETQ about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.
The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on Volution and ETQ, the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Volution and ETQ believe that the expectations reflected in such forward-looking statements are reasonable, Volution and ETQ can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to consummate the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions; the ability of Volution and ETQ to successfully integrate their respective operations and retain key employees; the potential impact of the announcement or consummation of the Acquisition on relationships, including with employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; significant competition that Volution and ETQ face; compliance with extensive government regulation; the combined company's ability to make acquisitions and its ability to integrate or manage such acquired businesses. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Volution nor ETQ, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure and Transparency Rules of the FCA, as applicable), neither Volution nor ETQ is under any obligation, and Volution and ETQ expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Publication on website
A copy of this announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Volution's website at www.volutiongroupplc.com and ETQ's website at www.diffusion-group.com by no later than 12.00 noon (London time) on the business day following this announcement. For the avoidance of doubt, the contents of these websites are not incorporated by reference and do not form part of this announcement.
Requesting hard copy documents
You may request a hard copy of this announcement by contacting the Company Secretary of ETQ during business hours on +44 (0) 20 8783 0033 or by submitting a request in writing to the Company Secretary of ETQ at the registered office of ETQ, at 47 Central Avenue, West Molesey, Surrey, KT8 2QZ. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. You may also request that all future documents, announcements and information to be sent to you in relation to the Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other information provided by ETQ Shareholders, persons with information rights and other relevant persons for the receipt of communications from ETQ may be provided to Volution during the offer period as required under Section 4 of Appendix 4 of the Code in order to comply with Rule 2.12(c).
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.
Not for release, publication or distribution, in whole or in part, in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.
11 November 2015
RECOMMENDED CASH ACQUISITION
of
ENERGY TECHNIQUE PLC
by
VOLUTION GROUP PLC
to be effected by
a Scheme of Arrangement under Part 26 of the Companies Act 2006
1. Introduction
The boards of directors of Volution Group plc ("Volution") and Energy Technique plc ("ETQ") are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash acquisition by which the entire issued and to be issued share capital of ETQ will be acquired by Volution. It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and to be set out in the Scheme Document, the Scheme Shareholders at the Scheme Record Time will be entitled to receive:
for each Scheme Share 345 pence in cash
The price of 345 pence in cash for each Scheme Share represents a premium of approximately:
· 18.9 per cent. to the volume-weighted average ETQ share price of 290 pence for the twelve-month period ended 25 February 2015 (being the last business day prior to the commencement of the Offer Period); and
· 10.4 per cent. to the closing ETQ share price of 312.5 pence on 25 February 2015 (being the last business day prior to the commencement of the Offer Period).
The Acquisition values ETQ's entire issued and to be issued ordinary share capital (assuming full exercise of options granted under the ETQ Share Scheme) at approximately £9.25 million on a fully diluted basis.
3. Background to and reasons for the Acquisition
Volution was admitted to the London Stock Exchange on 23 June 2014. One of Volution's strategies is to acquire and integrate businesses with well-established brands in the HVAC and ventilation market, operating in markets underpinned by favourable structural and regulatory dynamics and with an emphasis on heat recovery systems.
ETQ's trading subsidiary, Diffusion, is a designer, manufacturer and distributor of fan coils and commercial heating products to the commercial and residential sectors. Fan coil units, which are manufactured by Diffusion, are a device consisting of a heating or cooling coil and fan. It is part of a heating, ventilation and air conditioning ("HVAC") system that is found in residential and commercial buildings and is used to control the temperature in the space where it is installed.
For the 12 month period ended 31 March 2015, fan coil sales accounted for 81 per cent. of ETQ's revenue and the balance was in commercial heating. An average of approximately 30 per cent. of ETQ's fan coil sales over the past two years were in the residential sector in projects such as the Riverlight project in Nine Elms, the Shard (both residential & commercial), Holland Green and 1 Tower Bridge. With the Acquisition, Volution will acquire an established designer, manufacturer and distributor of fan coils and commercial heating products to the UK HVAC sector.
The Volution Directors believe that the Acquisition is also compelling for the following reasons:
Structural growth from regulatory drivers - New residential buildings are increasingly subject to a suite of legislative measures such as the European Energy Performance of Buildings Directive ("EPBD"), which mandates all new buildings to be "nearly zero-energy" by 2020 across Europe and is aimed at reducing carbon emissions, and improving energy efficiency in buildings. This can be done by a combination of increasing air-tightness, improving insulation and the use of energy efficient ventilation solutions. As buildings are becoming better insulated to comply with these regulatory measures, the risk of overheating is increasing. For many residential developments, it is becoming increasingly popular to include comfort cooling to ensure that home owners have the best possible environment to live in. Accordingly, much like the demand for Volution Group's energy efficient mechanical extract ventilation ("MEV") systems and mechanical ventilation with heat recovery ("MVHR") products, there are significant structural growth opportunities for manufacturers of high quality manufactured fan coils, particularly those with a focus on residential applications.
Complementary technology - Volution is a leader in the UK in the manufacture and design of MVHR products, particularly in residential new build dwellings. Both ventilation and cooling strategies are designed together, by building services consultants, as there is a relationship between them within the services package. MVHR helps to pre-warm incoming air from the outgoing stale air in the winter and provide cooler external air (through the summer bypass) in the summer. The fan coil further heats or cools the incoming air to the desired temperature. Accordingly, ETQ's technology will be complementary to that offered by the Volution Group.
Enhanced sales channels & customer relationships - The Volution Directors estimate that ETQ has approximately a 25 per cent. market share of the fan coil market in the UK. ETQ has an end-user base which includes Land Securities, Stanhope Properties, Grosvenor Estates, British Land, Marks & Spencer, Boots, Tesco and Sainsbury's. Volution believes lead sharing and coordinated sales efforts will be possible after the Acquisition. The Volution Directors believe that, with ETQ's reputation as a leader in the markets in which it operates, the Acquisition will provide opportunities to secure additional contracts for fan coil and MVHR products in new build residential and commercial buildings. In addition, end-users of the Volution Group will benefit from having access to an enhanced product portfolio and customer service.
Enhanced capacity - ETQ's manufacturing facility in Molesey is currently operating at close to maximum capacity and the Volution Directors believe that there should be opportunities to enhance manufacturing capacity when the ETQ business is combined with the enlarged Volution Group.
Financial metrics - The Volution Directors expect the Acquisition to be earnings enhancing in the first full financial year.
4. Recommendation
The ETQ Directors, who have been so advised by Cavendish as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Cavendish has taken into account the commercial assessments of the ETQ Directors.
Accordingly, the ETQ Directors have unanimously approved the Acquisition and intend to recommend that ETQ Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting as they have irrevocably undertaken to do in respect of their own beneficial holdings of, in aggregate, 408,340 issued ETQ Shares representing approximately 17.08 per cent. of ETQ's issued ordinary share capital as at 10 November 2015 (being the last business day prior to the date of this announcement).
5. Background to and reasons for the recommendation
As announced by ETQ on 26 February 2015, the ETQ Board decided that it would be in the best interests of ETQ Shareholders to offer ETQ for sale by means of a formal sale process. Cavendish was appointed to conduct the formal sale process and a number of potentially interested parties were contacted.
The ETQ Directors believe there is a strong commercial and cultural fit between ETQ and Volution, in terms of their strategies, products and service offerings. The ETQ Directors believe that combining the two businesses will create a larger and stronger group within the HVAC sector.
The offer price represents a 10.4 per cent. premium to the ETQ closing price on the last trading day prior to the start of the Offer Period and a 18.9 per cent premium to the volume-weighted average ETQ share price for the twelve-month period ended 25 February 2015 being the last business day prior to the commencement of the Offer Period. The ETQ Directors believe the Offer represents significant value for all ETQ Shareholders and, given the limited liquidity in ETQ Shares, provides an opportunity for ETQ Shareholders to fully monetise their shareholdings at an attractive price.
6. Irrevocable Undertakings
As stated above, all of the ETQ Directors who hold ETQ Shares have irrevocably undertaken to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of their entire beneficial holdings of, in aggregate, 408,340 issued ETQ Shares representing approximately 17.08 per cent. of the existing issued ordinary share capital of ETQ on 10 November 2015 (being the last business day prior to the date of this announcement).
In addition, Volution has received irrevocable undertakings from each of Peter Gyllenhammar, James Lugg, John Cawthorne and Danny Francis to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of their entire beneficial holdings of, in aggregate, 1,173,227 ETQ Shares, representing approximately 49.08 per cent. of the existing issued ordinary share capital of ETQ on 10 November 2015 (being the last business day prior to the date of this announcement) and irrevocable undertakings from the ETQ Directors and Gordon Winter to vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting in respect of their own beneficial holdings of, in aggregate, 199,831 ETQ Shares which are the subject of the ETQ Share Scheme, to the extent that these options are exercised.
The undertakings from the ETQ Directors and Peter Gyllenhammar, James Lugg, John Cawthorne, Danny Francis and Gordon Winter will cease to be binding only if the Scheme or Offer lapses or is withdrawn and no new, revised or replacement Scheme or Offer is announced in accordance with Rule 2.7 of the Code, in its place or is announced, in accordance with Rule 2.7 of the Code, at the same time. The undertakings will remain binding in the event that a higher competing offer for ETQ is made.
In total, therefore, Volution has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of 1,581,567 ETQ Shares which represent approximately 66.16 per cent. of the existing issued ordinary share capital of ETQ on 10 November 2015 (being the last business day prior to the date of this announcement) and 199,831 ETQ Shares which are the subject of the ETQ Share Scheme.
Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement. If the Acquisition is subsequently structured as a takeover offer, all the above undertakings will take effect as irrevocable undertakings to accept such offer.
7. Information relating to Volution
Volution operates through two divisions: the Ventilation Group, which principally supplies ventilation products for residential construction applications in the UK, Sweden, Norway and Germany and ventilation products for commercial construction applications in the UK. The Ventilation Group also supplies other products such as hand-driers and electric heaters. The other division, Torin-Sifan, supplies motors, fans and blowers to OEMs of heating and ventilation products for both residential and commercial construction applications in Europe.
The Volution Directors believe that Volution is a market leader in the UK residential ventilation products market, one of the leading suppliers in the UK commercial ventilation products market (excluding air handling units), a market leader in the Swedish residential ventilation products market and a market leader in the German decentralised heat recovery residential ventilation systems market. With the addition of the Ventilair Group, the Volution Directors believe that Volution is also a leading operator in the Belgian residential heat recovery market with a growing position in the ventilation solutions for the commercial market.
Volution was admitted to trading on the Premium Segment of the Main Market of the London Stock Exchange on 23 June 2014 with a stated strategy to gain market share through a combination of organic growth and selective acquisitions. Since its IPO, Volution has completed two acquisitions, the first, Brüggemann Energiekonzepte GmbH, a supplier of decentralised heat recovery ventilation in North Germany, and the second, Ventilair Group International BVBA, a leading manufacturer and distributor of residential ventilation products in the Belgian market with additional sales offices in the Netherlands and France. Both of these acquisitions are in addition to the acquisition of Fresh in 2012, PAX in 2013 and inVENTer in 2014 and have extended Volution's strong track record of integrating businesses into the Group. The Volution Directors believe that ETQ, with its complementary technology, product portfolio and experienced management team, would be an excellent fit with the Volution Group.
Current trading, trends and prospects
On 16 October 2015, Volution released its preliminary results for the 12 month period ended 31 July 2015 reporting revenue of £130.2 million, adjusted EBITDA of £32.1 million, adjusted profit before tax of £27.5 million and adjusted EPS of 11.0 pence (a 25 per cent. increase on the prior period). As at 31 July 2015, Volution has net debt of £21.2 million, leaving scope for further acquisitions.
In its preliminary results, Volution reinforced its publicly stated ambition to make further earnings enhancing acquisitions.
8. Information relating to ETQ
ETQ's trading subsidiary, ET Environmental Limited trading as "Diffusion", is a manufacturer of fan coils and commercial heating products to the UK commercial and residential sectors with a well-known end-user base, well-known brand and over 50 years of trading experience. The Diffusion brand is recognised by the UK heating ventilation and air conditioning sector ("HVAC") as highly engineered, quality products providing strong performance and energy efficiency. For the year ended 31 March 2015, ETQ generated sales of £10.775 million.
Diffusion's products are supplied into commercial offices, hotels, airports, retail outlets, schools, and residential developments. Business risk is reduced by third-party M&E contractors installing Diffusion's products. Fan coils are supplied to developments of the major UK property owning companies. Commercial heating end users include retail units, banks and hotels.
Diffusion operates from a 30,000 sq. ft. facility in West Molesey, Surrey, conveniently placed to serve its principal London and South East market.
9. Financing
The cash consideration payable by Volution under the terms of the Acquisition will be funded from existing cash resources and drawdowns that have been made from existing borrowing facilities of Volution.
Liberum, the financial adviser to Volution, is satisfied that resources are available to Volution to satisfy in full the cash consideration payable under the terms of the Acquisition.
10. Management and employees
Volution attaches great importance to the skills and experience of the existing management and employees of ETQ and expects that they will continue to contribute to the success of ETQ following completion of the Acquisition. Volution also recognises the strength of the ETQ brand and intends to retain it.
It is currently envisaged that, following completion of the Acquisition, ETQ will be incorporated into the UK Ventilation Group and all existing executive management of ETQ will be retained. The existing executive management will directly report to the managing director of the UK Ventilation Group. However, when ETQ ceases to be an AIM traded company following completion of the Acquisition, it is expected that the ETQ Non-Executive Director and the Company Secretary will cease their respective roles as these roles will no longer be required.
Volution confirms that it intends to safeguard fully the existing employment rights of all ETQ management and employees in accordance with applicable law and to comply with Volution's pension obligations for existing employees and members of ETQ 's pension schemes.
ETQ's manufacturing facility in Molesey is currently operating at close to maximum capacity and the Volution Directors believe that there is scope for increasing output. Volution intends to review the operations of the ETQ business following completion of the Acquisition and explore certain ways of enhancing manufacturing capacity. While no decisions have yet been made, this could involve the redeployment of some of ETQ's fixed assets to another of the Volution Group's factories if that is considered the most efficient manner to expand ETQ's manufacturing capacity. If such redeployment did occur, it could result in a small number of employees at ETQ's Molesey site connected with the operation of such assets being affected in the event they were unable to move to the Volution Group's operating site or be redeployed within the enlarged Volution Group.
11. ETQ Share Scheme
There are currently 333,050 options outstanding under the ETQ Share Scheme.
It is envisaged that the holders of options under the ETQ Share Scheme will become entitled to exercise their options and will be able to participate in the Acquisition in the event that they choose to exercise their options.
Participants in the ETQ Share Scheme will be contacted regarding the effect of the Acquisition on their rights (if any) and appropriate proposals will be made to such participants in due course. Details of these proposals will be set out in the Scheme Document and in separate letters to be sent to participants in the ETQ Share Scheme.
12. Offer-related Arrangements
On 14 July 2015, Volution and Cavendish (on behalf of ETQ) entered into a confidentiality agreement in relation to the Acquisition, pursuant to which, amongst other things, Volution undertook, subject to certain exceptions (including the provisions of the Code), to keep information relating to ETQ confidential and not to disclose it to third parties. The confidentiality agreement further includes customary non-solicitation provisions.
13. Structure of the Acquisition
It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement between ETQ and the Scheme Shareholders, under Part 26 of the Companies Act. The procedure involves, among other things, an application by ETQ to the Court to sanction the Scheme, in consideration for which the Scheme Shareholders will receive cash on the basis described in paragraph 2 above. The purpose of the Scheme is for Volution to become the owner of the entire issued and to be issued share capital of ETQ.
The Scheme is subject to the Conditions and certain further terms referred to in Appendix 1 to this announcement and to be set out in the Scheme Document, and will only become effective if, among other things, the following events occur on or before 29 February 2016 or such later date as Volution and ETQ may, with the consent of the Panel, agree and, if required, the Court may approve:
· resolutions to approve the Scheme are passed by a majority in number of the Scheme Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing three-quarters or more in value of each class of the Scheme Shares held by those Scheme Shareholders;
· the Resolution necessary to implement the Scheme is passed by the requisite majority of ETQ Shareholders at the General Meeting;
· the Scheme is sanctioned (with or without modification, on terms agreed by Volution and ETQ) by the Court; and
· an office copy of the Scheme Court Order is delivered to the Registrar of Companies.
Upon the Scheme becoming effective: (i) it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour); and (ii) share certificates in respect of Scheme Shares will cease to be valid and entitlements to Scheme Shares held within the CREST system will be cancelled.
If the Scheme does not become effective on or before 29 February 2016 (or such later date as Volution and ETQ may, with the consent of the Panel and, if required, the Court, agree), it will lapse and the Acquisition will not proceed (unless the Panel otherwise consents).
The Scheme Document will include full details of the Scheme, together with notices of the Court Meeting and the General Meeting. The Scheme Document will also contain the expected timetable for the Acquisition, and will specify the necessary actions to be taken by ETQ Shareholders. The Scheme Document will be posted to ETQ Shareholders and, for information only, to persons with information rights and to holders of options and awards granted under the ETQ Share Scheme, as soon as practicable. Subject, amongst other things, to the satisfaction or waiver of the Conditions, it is expected that the Scheme will become effective on 21 December 2015.
14. Delisting and re-registration
It is intended that dealings in ETQ Shares will be suspended at 7.30 a.m. (London time) on the day of the Scheme Court Hearing. It is further intended that an application will be made to the London Stock Exchange for the cancellation of trading of the ETQ Shares on AIM, with effect as of, or shortly following, the Effective Date.
It is also intended that, following the Scheme becoming effective, ETQ will be re-registered as a private company under the relevant provisions of the Companies Act.
15. Disclosure of interests in ETQ relevant securities
Volution confirms that it is making on the date of this announcement an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code.
ETQ confirms that it is making on the date of this announcement an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.2(a) of the Code.
Except for the irrevocable undertakings referred to in paragraph 6 above, as at close of business on 10 November 2015 (being the latest practicable date prior to the date of this announcement), neither Volution, nor any of the Volution Directors or any member of the Volution Group, nor, so far as the Volution Directors are aware, any person acting in concert (within the meaning of the Code) with Volution for the purposes of the Acquisition had any interest in, right to subscribe for, or had borrowed or lent any ETQ Shares or securities convertible or exchangeable into ETQ Shares, nor did any such person have any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery, or any dealing arrangement of the kind referred to in Note 11 of the definition of acting in concert in the Code, in relation to ETQ Shares or in relation to any securities convertible or exchangeable into ETQ Shares in the twelve months preceding the date of this announcement.
16. Overseas shareholders
The availability of the Acquisition or the distribution of this announcement to ETQ Shareholders who are not resident in the United Kingdom may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. ETQ Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.
This announcement does not constitute an offer for sale for any securities or an offer or an invitation to purchase any securities. ETQ Shareholders are advised to read carefully the Scheme Document and related Forms of Proxy once these have been dispatched.
17. Documents published on a website
Copies of the following documents will, by no later than 12.00 noon (London time) on 12 November 2015, be published on ETQ's website at www.diffusion-group.com and Volution's website at www.volutiongroupplc.com until completion of the Acquisition:
· the irrevocable undertakings referred to in paragraph 6;
· the confidentiality agreement referred to in paragraph 12; and
· this announcement.
18. General
The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1 and the further terms and conditions to be set out in the Scheme Document when issued.
The Scheme will be governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Scheme will be subject to the applicable requirements of the Code, the Panel and the London Stock Exchange.
The bases and sources of certain financial information contained in this announcement are set out in Appendix 2. Certain terms used in this announcement are defined in Appendix 4.
Enquiries
Volution Group plc
Ronnie George |
+44 (0) 1293 441501 |
Ian Dew |
+44 (0) 1293 441536 |
Liberum Capital Limited (Financial Adviser and Broker to Volution Group plc)
Neil Patel/Richard Bootle |
+44 (0) 20 3100 2222 |
Brunswick (Financial Public Relations Adviser to Volution Group plc)
Energy Technique plc
Leigh Stimpson |
+44 (0) 20 8783 0033 |
Rob Unsworth |
+44 (0) 20 8783 0033 |
Cavendish Corporate Finance LLP (Financial Adviser to Energy Technique plc)
Andrew Jeffs/Philip Barker |
+44 (0) 20 7908 6000 |
finnCap Ltd (Nominated Adviser and Broker to Energy Technique plc)
Ed Frisby/Scott Mathieson |
+44 (0) 20 7220 0500 |
Further information
This announcement is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of ETQ in any jurisdiction in contravention of applicable law. The Acquisition will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Acquisition including details of how to vote in respect of the Scheme. Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis on the information contained in the Scheme Document.
Liberum Capital Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Volution and no‑one else in connection with the Acquisition and will not be responsible to anyone other than Volution for providing the protections afforded to clients of Liberum nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement.
Cavendish Corporate Finance LLP, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for ETQ and no-one else in connection with the Acquisition and will not be responsible to anyone other than ETQ for providing the protections afforded to clients of Cavendish nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement..
finnCap Ltd, which is authorised and regulated in the United Kingdom by the FCA, is acting for ETQ in relation to the matters described in this announcement and is not advising any other person, and accordingly will not be responsible to anyone other than ETQ for providing the protections afforded to clients of finnCap Ltd or for providing advice in relation to the matters described in this announcement.
Overseas jurisdictions
The availability of the Acquisition to ETQ Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to overseas shareholders will be contained in the Scheme Document.
The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purposes of complying with English law, the AIM Rules, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England.
Copies of this announcement and the formal documentation relating to the Scheme and the Acquisition will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction.
US Holders should note that the Acquisition relates to the securities of a UK company, is subject to UK disclosure requirements (which are different from those of the US) and is proposed to be implemented under a scheme of arrangement provided for under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act. Accordingly, the Scheme will be subject to UK disclosure requirements and practices, which are different from the disclosure requirements of the US tender offer and proxy solicitation rules. The financial information included in this announcement and the Scheme documentation has been or will have been prepared in accordance with IFRS and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If Volution exercises its right to implement the acquisition of the ETQ Shares by way of a takeover offer, such offer will be made in compliance with applicable US tender offer and securities laws and regulations.
The receipt of cash pursuant to the Acquisition by a US Holder as consideration for the transfer of its Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each ETQ Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him.
It may be difficult for US Holders to enforce their rights and claims arising out of the US federal securities laws, since Volution and ETQ are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US. US Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Volution or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, ETQ Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service of the London Stock Exchange and will be available on the London Stock Exchange website, www.londonstockexchange.com.
Forward looking statements
This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Volution and ETQ may contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Volution and ETQ about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.
The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on Volution and ETQ, the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Volution and ETQ believe that the expectations reflected in such forward-looking statements are reasonable, Volution and ETQ can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to consummate the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions; the ability of Volution and ETQ to successfully integrate their respective operations and retain key employees; the potential impact of the announcement or consummation of the Acquisition on relationships, including with employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; significant competition that Volution and ETQ face; compliance with extensive government regulation; the combined company's ability to make acquisitions and its ability to integrate or manage such acquired businesses. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Volution nor ETQ, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure and Transparency Rules of the FCA, as applicable), neither Volution nor ETQ is under any obligation, and Volution and ETQ expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Publication on website
A copy of this announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Volution's website at www.volutiongroupplc.com and ETQ's website at www.diffusion-group.com by no later than 12.00 noon (London time) on the business day following this announcement. For the avoidance of doubt, the contents of these websites are not incorporated by reference and do not form part of this announcement.
Requesting hard copy documents
You may request a hard copy of this announcement by contacting the Company Secretary of ETQ during business hours on +44 (0) 8783 0033 or by submitting a request in writing to the Company Secretary of ETQ at the registered office of ETQ, at 47 Central Avenue, West Molesey, Surrey, KT8 2QZ. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. You may also request that all future documents, announcements and information to be sent to you in relation to the Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other information provided by ETQ Shareholders, persons with information rights and other relevant persons for the receipt of communications from ETQ may be provided to Volution during the offer period as required under Section 4 of Appendix 4 of the Code in order to comply with Rule 2.12(c).
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.
Appendix 1
Conditions and Certain Further Terms of the Scheme and the Acquisition
A. Conditions to the Scheme and Acquisition
1. The Acquisition will be conditional upon the Scheme becoming unconditional and becoming effective, subject to the provisions of the Code, by no later than 29 February 2016 or such later date (if any) as Volution and ETQ may agree (if required), with the consent of the Panel and (if required) the Court may approve.
2. The Scheme will be conditional upon:
(a) the approval of the Scheme at the Court Meeting (or at any adjournment thereof, provided that the Court Meeting may not be adjourned beyond the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course or such later date (if any) as Volution and ETQ may agree and the court may allow and approve) by a majority in number of the Scheme Shareholders entitled to vote present and voting, either in person or by proxy, representing 75 per cent. or more in nominal value of each class of the Scheme Shares held by those Scheme Shareholders;
(b) all resolutions in connection with or required to approve and implement the Scheme as set out in the notice of the General Meeting (including, without limitation, the Resolution) being duly passed by votes in favour representing at least 75 per cent. of the votes cast in person or by proxy by ETQ Shareholders at the General Meeting (or at any adjournment thereof, provided that the General Meeting may not be adjourned beyond the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document in due course or such later date (if any) as Volution and ETQ may agree and the court may allow and approve); and
(c) the sanction of the Scheme without modification or with modification on terms acceptable to Volution and ETQ (provided that the Scheme Court Hearing may not be adjourned beyond the 22nd day after the expected date of the Scheme Court Hearing to be set out in the Scheme Document in due course or such later date (if any) as Volution and ETQ may agree and the court may allow and approve) and the delivery of an office copy of the Scheme Court Order to the Registrar of Companies.
3. In addition, Volution and ETQ have agreed that, subject as stated in Part B below, the Acquisition will be conditional upon the following matters and, accordingly, the necessary actions to make the Scheme effective will not be taken unless such conditions (as amended, if appropriate) have been satisfied or, where relevant, waived:
(a) no Third Party having intervened (as defined below) and there not continuing to be outstanding any statute, regulation or order of any Third Party, in each case which would or might reasonably be expected to:
(i) make the Scheme or the Acquisition or, in each case, its implementation or the acquisition or proposed acquisition by Volution or any member of the Wider Volution Group of any shares or other securities in, or control or management of, ETQ or any member of the Wider ETQ Group void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly prevent, prohibit, restrain, restrict or delay the same or impose additional conditions or obligations with respect to the Scheme or the Acquisition or such acquisition, or otherwise impede, challenge or interfere with the Scheme or Acquisition or such acquisition, or require amendment to the terms of the Scheme or Acquisition or the acquisition or proposed acquisition of any ETQ Shares or the acquisition of control or management of ETQ or the Wider ETQ Group by Volution or any member of the Wider Volution Group;
(ii) limit or delay, or impose any limitations on, the ability of any member of the Wider Volution Group or any member of the Wider ETQ Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities in, or to exercise voting or management control over, any member of the Wider ETQ Group or any member of the Wider Volution Group;
(iii) require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider Volution Group of any shares or other securities in ETQ or of all or any material portion of their respective businesses, assets or properties or limit the ability of any of them to conduct any of their respective businesses or to own or control any of their respective material assets or material properties or any part thereof;
(iv) except pursuant to sections 974 to 991 of the Companies Act, require any member of the Wider Volution Group or of the Wider ETQ Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in any member of either group owned by any third party;
(v) limit the ability of any member of the Wider Volution Group or of the Wider ETQ Group to conduct in any material respect or integrate or co‑ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Volution Group or of the Wider ETQ Group;
(vi) result in any member of the Wider ETQ Group or the Wider Volution Group ceasing to be able to carry on business under any name under which it presently does so; or
(vii) otherwise materially adversely affect any or all of the business, assets, profits, financial or trading position or prospects of any member of the Wider ETQ Group or of the Wider Volution Group,
and all applicable waiting and other time periods during which any Third Party could intervene under the laws of any relevant jurisdiction having expired, lapsed or been terminated;
(b) all Authorisations (other than those set out in paragraph 2 above), which are necessary or are reasonably considered necessary by Volution in any relevant jurisdiction for or in respect of the Scheme or Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, ETQ or any other member of the Wider ETQ Group by any member of the Wider Volution Group or the carrying on by any member of the Wider ETQ Group of its business having been obtained, in terms and in a form satisfactory to Volution (acting reasonably), from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider ETQ Group has entered into contractual arrangements, in each case where the absence of such Authorisation would or might reasonably be expected to have a material adverse effect on the ETQ Group taken as a whole and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same;
(c) since 31 March 2015 and except as Disclosed, there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Wider ETQ Group is a party, or by or to which any such member or any of its assets is or are or may be bound, entitled or subject or any circumstance, which, in each case as a consequence of the Scheme or Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control of, ETQ or any other member of the Wider ETQ Group by any member of the Wider Volution Group or otherwise, would or might reasonably be expected to result in (in any case to an extent which would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole):
(i) any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any member of the Wider ETQ Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated maturity date or repayment date or the ability of any member of the Wider ETQ Group to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Wider ETQ Group or any such mortgage, charge or other security interest (wherever created, arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, licence, permit, franchise or instrument, or the rights, liabilities, obligations or interests of any member of the Wider ETQ Group thereunder, being, or becoming capable of being, terminated or adversely modified or affected or any adverse action being taken or any obligation or liability arising thereunder;
(iv) any liability of any member of the Wider ETQ Group to make any severance, termination, bonus or other payment to any employee or key producer of the Wider ETQ Group;
(v) any asset or interest of any member of the Wider ETQ Group being or falling to be disposed of or charged or ceasing to be available to any member of the Wider ETQ Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider ETQ Group otherwise than in the ordinary course of business;
(vi) any member of the Wider ETQ Group ceasing to be able to carry on business under any name under which it presently does so;
(vii) the creation of any liabilities (actual or contingent) by any member of the Wider ETQ Group;
(viii) the rights, liabilities, obligations or interests of any member of the Wider ETQ Group under any such arrangement, agreement, licence, permit, franchise or other instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being terminated or adversely modified or affected; or
(ix) the financial or trading position or prospects or the value of any member of the Wider ETQ Group being prejudiced or adversely affected,
and no event having occurred which, under any provision of any such arrangement, agreement, licence, permit or other instrument, would or would reasonably be expected to result in any of the events or circumstances which are referred to in paragraphs (i) to (ix) of this Condition 3(c) in any case to an extent which would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(d) since 31 March 2015 and except as Disclosed, no member of the Wider ETQ Group having:
(i) entered into, terminated or varied the terms of or made any offer (which remains open for acceptance) to enter into or vary the terms of, any contract, agreement, commitment, transaction or arrangement with any person employed by any member of the Wider ETQ Group, including entering into any such arrangement which would or might reasonably be expected to result in any liability of any member of the Wider ETQ Group to make any severance, termination, bonus or other payments to any of its directors or other officers, which would or might reasonably be expected to be material in the context of the Acquisition or which would or might reasonably be expected to have a material adverse effect on the financial position or prospects of the ETQ Group taken as a whole;
(ii) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other material benefit relating to the employment or termination of employment of any person employed by the Wider ETQ Group;
(iii) made or agreed or consented to:
(A) any material change to:
(I) the terms of the trust deeds constituting the pension scheme(s) established for its directors, employees or their dependants; or
(II) the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder; or
(III) the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined; or
(IV) the basis upon which the liabilities (including pensions) or such pension schemes are funded, valued or made,
(B) any change to the trustees including the appointment of a trust corporation;
in each case, which would or might reasonably be expected to have a material effect in the context of the ETQ Group taken as a whole;
(iv) issued or agreed to issue, or authorised the issue of, additional shares of any class, or securities convertible into or exercisable or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or transferred or sold any shares out of treasury, in all such cases, other than as between ETQ and wholly‑owned subsidiaries of ETQ or any shares issued or shares transferred from treasury upon the exercise of any options or vesting of awards granted under the ETQ Share Scheme;
(v) purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital to an extent which (other than in the case of ETQ) would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(vi) recommended, declared, paid or made any dividend or other distribution whether payable in cash or otherwise or made any bonus issue (other than to ETQ or a wholly‑owned subsidiary of ETQ);
(vii) made or authorised any change in its loan capital;
(viii) entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merged with, demerged or acquired any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any assets (including shares in any undertaking and trade investments) or authorised the same (in each case to an extent which would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole);
(ix) issued or authorised the issue of, or made any change in or to, any debentures or (except in the ordinary course of business or except as between ETQ and its wholly-owned subsidiaries or between such wholly-owned subsidiaries) incurred or increased any indebtedness or liability (actual or contingent) which in any case would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(x) entered into, varied, or authorised any agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which:
(A) is of a long term, onerous or unusual nature or magnitude or which is reasonably likely to involve an obligation of such nature or magnitude; or
(B) is likely to restrict the business of any member of the Wider ETQ Group; or
(C) is other than in the ordinary course of business,
and which would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(xi) entered into, implemented, effected or authorised any merger, demerger, reconstruction, amalgamation or scheme in respect of itself or another member of the Wider ETQ Group;
(xii) taken any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its winding‑up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction which in any case would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(xiii) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;
(xiv) waived or compromised any claim otherwise than in the ordinary course of business which would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(xv) made any alteration to its memorandum or articles of association other than in connection with the Scheme; or
(xvi) entered into any agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this Condition 3(d);
(e) since 31 March 2015 and except as Disclosed:
(i) there having been no adverse change or deterioration in the business, assets, financial or trading positions or profits or prospects of any member of the Wider ETQ Group which in any case would or would reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(ii) no contingent or other liability of any member of the Wider ETQ Group having arisen or become apparent or increased which in any case would or would reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(iii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider ETQ Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider ETQ Group which in any case would or would reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(iv) (other than as a result of the Acquisition) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened, announced, implemented, instituted by or against or remaining outstanding against or in respect of any member of the Wider ETQ Group which in any case would or would reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(v) other than with the consent of Volution, no action having been taken or proposed by any member of the Wider ETQ Group, or having been approved by ETQ Shareholders or consented to by the Panel, which falls or would fall within or under Rule 21.1 of the Code or which otherwise is or would be materially inconsistent with the implementation by Volution of the Acquisition on the basis contemplated as at the date of this announcement; and
(vi) no member of the Wider ETQ Group having conducted its business in breach of any applicable laws and regulations which in any case would or would reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(f) Volution not having discovered:
(i) that any financial or business or other information concerning the Wider ETQ Group disclosed at any time by or on behalf of any member of the Wider ETQ Group, whether publicly, to any member of the Wider Volution Group or to any of their advisers or otherwise, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make any information contained therein not misleading and which was not subsequently corrected before the date of this announcement by disclosure either publicly or otherwise to Volution to an extent which in any case would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(ii) that any member of the Wider ETQ Group is subject to any liability (actual or contingent) which is not Disclosed and which in any case would or might reasonably be expected to be material in the context of the ETQ Group taken as a whole;
(iii) any past or present member of the Wider ETQ Group has not complied in all material respects with all applicable legislation, regulations or other requirements of any jurisdiction or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous substance or any substance likely to impair the environment (including property) or harm human health or otherwise relating to environmental matters or the health and safety of humans, which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) on the part of any member of the Wider ETQ Group;
(iv) there is any liability (actual or contingent) of any past or present member of the Wider ETQ Group under any environmental legislation, regulation, notice, circular or order of any government, governmental, quasi-governmental, state or local government, supranational, statutory or other regulatory body, agency, court, association or any other person or body in any jurisdiction and which is material in the context of the Wider ETQ Group taken as a whole and which was not Disclosed; or
(v) circumstances exist that were not Disclosed which would or might reasonably be expected to lead to any Third Party instituting, or whereby any member of the Wider Volution Group or any present or past member of the Wider ETQ Group would or might reasonably be expected to be required to institute, an environmental audit or take any other steps which would or might reasonably be expected to result in any material liability (whether actual or contingent) to improve, modify existing or install new plant, machinery or equipment or carry out changes in the processes currently carried out or make good, remediate, repair, re-instate or clean up any land or other asset currently or previously owned, occupied or made use of by any past or present member of the Wider ETQ Group,
4. For the purpose of these Conditions:
(a) "Disclosed" means the information disclosed by or on behalf of ETQ (a) in the annual report and accounts of the ETQ Group for the financial year ended 31 March 2015; (b) the interim results of the ETQ Group for the six month period ended on 30 September 2015; (c) in this announcement; (d) in any other announcement to a Regulatory Information Service by or on behalf of ETQ prior to the publication of this announcement; (e) by ETQ in the Data Room before the date of this announcement;
(b) "Data Room" means the virtual data room hosted by Sterling of 63 Queen Victoria Street, London, EC4N 4UA in relation to ETQ;
(c) "Third Party" means any central bank, government, government department or governmental, quasi‑governmental, supranational, statutory, regulatory, environmental or investigative body, authority (including any national or supranational anti‑trust or merger control authority), court, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction, including, for the avoidance of doubt, the Panel;
(d) a Third Party shall be regarded as having "intervened" if, in relation to the matters referred to in paragraph 3(a) above, it has decided to take, or has publicly announced an intention, to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and "intervene" shall be construed accordingly; and
(e) "Authorisations" means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, provisions and approvals.
B. Certain further terms of the Scheme and the Acquisition
1. Conditions 3(a) to 3(f) (inclusive) must be fulfilled, or remain satisfied or (if capable of waiver) be waived by 11.59 p.m. on the date immediately preceding the date of the Scheme Court Hearing, failing which the Scheme will lapse and will not proceed.
2. Notwithstanding paragraph 1 above and subject to the requirements of the Panel, Volution reserves the right in its sole discretion to waive all or any of Conditions 3(a) to 3(f) inclusive, in whole or in part and to proceed with the Scheme Court Hearing prior to the fulfilment, satisfaction or waiver of any of the Conditions 3(a) to 3(f) inclusive.
3. Volution shall be under no obligation to waive (if capable of waiver), or to treat as fulfilled any of Conditions 3(a) to 3(f) (inclusive) by a date earlier than the latest date specified above for the fulfilment of that condition, notwithstanding that the other Conditions may at such earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any Condition may not be capable of fulfilment.
4. Volution reserves the right to elect to implement the Acquisition by way of a takeover offer (as defined in Part 28 of the Companies Act), subject to the Panel's consent. In such event, such Offer will be implemented on the same terms and conditions (subject to appropriate amendments, including (without limitation) an acceptance condition set at 75 per cent. (or such other percentage (being more than 50 per cent.) as Volution may decide (subject to the Panel's consent) of the shares to which such Offer relates) so far as applicable, as those which would apply to the Scheme.
5. If the Panel requires Volution to make an offer or offers for any ETQ Shares under the provisions of Rule 9 of the Code, Volution may make such alterations to the Conditions as are necessary in order to comply with the provisions of that Rule.
6. The Acquisition will be subject, inter alia, to the Conditions and certain further terms which are set out in this Appendix 1 and those terms which will be set out in the Scheme Document and such further terms as may be required in order to comply with the AIM Rules and the provisions of the Code.
7. The Acquisition will lapse if the UK Competition and Markets Authority makes a reference initiating a Phase 2 investigation before the later of the Court Meeting and the General Meeting.
8. ETQ Shares will be acquired by Volution fully paid and free from all liens, equitable interests, charges, encumbrances and other third party rights of any nature whatsoever and together with all rights attaching to them, including (without limitation) the right to receive and retain in full all dividends and other distributions (if any) declared, made or payable after the date of this announcement or paid, or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the date of this announcement.
9. This announcement and any rights or liabilities arising hereunder, the Acquisition, the Scheme, and any proxies will be governed by English law and be subject to the jurisdiction of the courts of England and Wales. The Scheme will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the AIM Rules.
10. Any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements. Further information in relation to overseas shareholders will be contained in the Scheme Document.
11. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.
Appendix 2
Bases and Sources
(a) The value attributed to the existing issued and to be issued ordinary share capital of ETQ is based upon 2,390,516 ETQ Shares in issue on 10 November 2015, being the last dealing day prior to the date of this announcement and the net dilutive impact of 291,057 ETQ Shares which are the subject of options and/or awards granted under the ETQ Share Scheme.
(b) Unless otherwise stated, the financial information on ETQ is extracted (without material adjustment) from ETQ's Annual Report and Accounts for the year ended 31 March 2015.
(c) The closing prices of the ETQ Shares on 25 February 2015 are taken from the Daily Official List.
(d) The volume weighted average price for the ETQ Shares is derived from Bloomberg.
Appendix 3
Details of Irrevocable Undertakings
Directors' Irrevocable Undertakings
The following holders of ETQ Shares have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in relation to the following ETQ Shares which are currently in issue:
Name |
Number of ETQ Shares |
Percentage of total ETQ Shares |
Leigh Stimpson |
176,754 |
7.39 |
Walter Goldsmith |
109,980 |
4.60 |
Martin Reid |
121,606 |
5.09 |
Total |
408,340 |
17.08 |
The undertakings from the ETQ Directors in relation to their ETQ Shares currently in issue will cease to be binding only if the Scheme or Offer lapses or is withdrawn and no new, revised or replacement Scheme or Offer is announced in accordance with Rule 2.7 of the Code (which represents no diminution in the value of, or change to the form of, the consideration being offered and which contains no material changes to the commercial terms of, and no material changes to the conditions to, the Acquisition, which are less favourable to acceptors than those contained in this announcement or as may otherwise be required to comply with the requirements of the Panel, the Financial Conduct Authority or London Stock Exchange plc), in its place or is announced, in accordance with Rule 2.7 of the Code, at the same time. The undertakings will remain binding in the event that a higher competing offer for ETQ is made.
ETQ Shareholders' Irrevocable Undertakings
The following holders of ETQ Shares have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in relation to the following ETQ Shares which are currently in issue:
Name |
Number of ETQ Shares |
Percentage of total ETQ Shares |
Peter Gyllenhammar |
605,612 |
25.33 |
James Lugg |
260,931 |
10.92 |
John Cawthorne |
224,480 |
9.39 |
Danny Francis |
82,204 |
3.44 |
Total |
1,173,227 |
49.08 |
The undertakings from Peter Gyllenhammar, James Lugg, John Cawthorne and Danny Francis will cease to be binding only if the Scheme or Offer lapses or is withdrawn and no new, revised or replacement Scheme or Offer is announced in accordance with Rule 2.7 of the Code (which represents no diminution in the value of, or change to the form of, the consideration being offered and which contains no material changes to the commercial terms of, and no material changes to the conditions to, the Acquisition, which are less favourable to acceptors than those contained in this announcement or as may otherwise be required to comply with the requirements of the Panel, the Financial Conduct Authority or London Stock Exchange plc), in its place or is announced, in accordance with Rule 2.7 of the Code, at the same time. The undertakings will remain binding in the event that a higher competing offer for ETQ is made.
ETQ Optionholders' Irrevocable Undertakings
The following holders of options in respect of ETQ Shares granted under the ETQ Share Scheme have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in relation to the following ETQ Shares which are to be issued under the ETQ Share Scheme, to the extent that these options are exercised:
Name |
Number of ETQ Shares under the ETQ Share Scheme |
Leigh Stimpson |
83,263 |
Martin Reid |
83,263 |
Gordon Winter |
33,305 |
Total |
199,831 |
The undertakings from Leigh Stimpson, Martin Reid and Gordon Winter in relation to their ETQ Shares which are to be issued under the ETQ Share Scheme will cease to be binding only if the Scheme or Offer lapses or is withdrawn and no new, revised or replacement Scheme or Offer is announced in accordance with Rule 2.7 of the Code (which represents no diminution in the value of, or change to the form of, the consideration being offered and which contains no material changes to the commercial terms of, and no material changes to the conditions to, the Acquisition, which are less favourable to acceptors than those contained in this announcement or as may otherwise be required to comply with the requirements of the Panel, the Financial Conduct Authority or London Stock Exchange plc), in its place or is announced, in accordance with Rule 2.7 of the Code, at the same time. The undertakings will remain binding in the event that a higher competing offer for ETQ is made.
Appendix 4
Definitions
The following definitions apply throughout this announcement unless the context requires otherwise.
"£", "Sterling", "pence" or "p" |
the lawful currency of the UK |
"Acquisition" |
the direct or indirect acquisition of the entire issued and to be issued share capital of ETQ by Volution (other than ETQ Shares already held by Volution, if any) to be implemented by way of the Scheme or (should Volution so elect, subject to the consent of the Panel) by way of the Offer |
"AIM Rules" |
the AIM Rules for Companies published by the London Stock Exchange from time to time |
"AIM" |
AIM, a market operated by the London Stock Exchange |
"Cavendish" |
Cavendish Corporate Finance LLP |
"Code" |
the City Code on Takeovers and Mergers |
"Companies Act" |
the Companies Act 2006, as amended from time to time |
"Conditions" |
the conditions to the implementation of the Acquisition (including the Scheme) as set out in Appendix 1 to this announcement and to be set out in the Scheme Document |
"Court Meeting" |
the meeting of the Scheme Shareholders to be convened by order of the Court pursuant to section 896 of the Companies Act, notice of which will be set out in the Scheme Document, for the purpose of approving the Scheme, including any adjournment thereof |
"Court" |
the High Court of Justice of England and Wales |
"CREST" |
the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755)) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in such Regulations) in accordance with which securities may be held and transferred in uncertificated form |
"Daily Official List" |
AIM appendix of the daily official list of the London Stock Exchange |
"Dealing Disclosure" |
an announcement pursuant to Rule 8 of the Code containing details of dealings in interests in relevant securities of a party to an offer |
"Effective Date" |
the date upon which the Scheme becomes effective in accordance with its terms |
"ETQ Directors" |
the directors of ETQ |
"ETQ Group" |
ETQ and its subsidiary undertakings |
"ETQ Share Scheme" |
ETQ's EMI share option scheme |
"ETQ Shareholders" |
the registered holders of ETQ Shares from time to time |
"ETQ Shares" |
ordinary shares of 10 pence each in the capital of ETQ |
"ETQ" |
Energy Technique plc |
"Excluded Shares" |
(i) any ETQ Shares beneficially owned by Volution or any other member of the Volution Group; (ii) any ETQ Shares held in treasury by ETQ and (iii) any other ETQ Shares which Volution and ETQ agree will not be subject to the Scheme |
"FCA" |
the Financial Conduct Authority |
"Forms of Proxy" |
the form of proxy in connection with each of the Court Meeting and the General Meeting, which shall accompany the Scheme Document |
"General Meeting" |
the general meeting of ETQ Shareholders to be convened in connection with the Scheme, notice of which will be set out in the Scheme Document, including any adjournment thereof |
"IFRS" |
International Financial Reporting Standards as adopted by the European Union |
"Liberum" |
Liberum Capital Limited |
"London Stock Exchange" |
London Stock Exchange plc |
"Offer" |
if (subject to the consent of the Panel) Volution elects to effect the Acquisition by way of a takeover offer, the offer to be made by or on behalf of Volution to acquire the issued and to be issued ordinary share capital of ETQ on the terms and subject to the conditions to be set out in the related offer document |
"Offer Period" |
the offer period (as defined in the Code) relating to ETQ, which commenced on 26 February 2015 |
"Panel" |
the Panel on Takeovers and Mergers |
"Registrar of Companies" |
the Registrar of Companies in England and Wales |
"Regulatory Information Service" |
any information service authorised from time to time by the FCA for the purpose of disseminating regulatory announcements |
"Resolution" |
the resolution to be proposed by ETQ at the General Meeting in connection with, among other things, the approval of the Scheme and the alteration of ETQ's articles of association and such other matters as may be necessary to implement the Scheme and the delisting of the ETQ Shares |
"Restricted Jurisdictions" |
any jurisdiction where the extension or availability of the Scheme or Offer would breach any applicable law |
"Scheme Court Hearing" |
the hearing of the Court to sanction the Scheme |
"Scheme Court Order" |
the order of the Court sanctioning the Scheme under Part 26 of the Companies Act |
"Scheme Document" |
the document to be sent to (among others) ETQ Shareholders containing and setting out, among other things, the full terms and conditions of the Scheme and containing the notices convening the Court Meeting and General Meeting |
"Scheme Record Time" |
the time and date specified as such in the Scheme Document, expected to be 6.00 p.m. on the business day immediately prior to the Effective Date |
"Scheme Shareholders" |
holders of Scheme Shares |
"Scheme Shares" |
ETQ Shares: (a) in issue as at the date of the Scheme Document; (b) (if any) issued after the date of the Scheme Document and prior to the Scheme Voting Record Time; and (c) (if any) issued on or after the Scheme Voting Record Time and before the Scheme Record Time, either on terms that the original or any subsequent holders thereof shall be bound by the Scheme or in respect of which the holders thereof shall have agreed in writing to be bound by the Scheme, but in each case other than the Excluded Shares |
"Scheme Voting Record Time" |
the time and date specified in the Scheme Document by reference to which entitlement to vote on the Scheme will be determined |
"Scheme" |
the scheme of arrangement proposed to be made under Part 26 of the Companies Act between ETQ and the Scheme Shareholders, with or subject to any modification, addition or condition approved or imposed by the Court and agreed to by ETQ and Volution |
"Substantial Interest" |
a direct or indirect interest in 20 per cent. or more of the voting equity capital of an undertaking |
"treasury shares" |
any ETQ Shares held by ETQ as treasury shares |
"UK" or "United Kingdom" |
the United Kingdom of Great Britain and Northern Ireland |
"United States of America", "United States" or "US" |
the United States of America, its territories and possessions, any state of the United States and the District of Columbia |
"US Exchange Act" |
the United States Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (as amended) |
"US Holders" |
holders of ETQ Shares ordinarily resident in the US or with a registered address in the US, and any custodian, nominee or trustee holding ETQ Shares for persons in the US or with a registered address in the US |
"US Securities Act" |
the United States Securities Act of 1933 and the rules and regulations promulgated thereunder (as amended) |
"US$" |
the lawful currency of the US |
"Volution Group" |
Volution and its subsidiary undertakings |
"Volution" |
Volution Group plc |
"Wider ETQ Group" |
ETQ and the subsidiaries and subsidiary undertakings of ETQ and associated undertakings (including any joint venture, partnership, firm or company in which any member of the ETQ Group is interested or any undertaking in which ETQ and such undertakings (aggregating their interests) have a Substantial Interest) |
"Wider Volution Group" |
Volution and the subsidiaries and subsidiary undertakings of Volution and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Volution Group is interested or any undertaking in which Volution and such undertakings (aggregating their interests) have a Substantial Interest) |
For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the meanings given by the Companies Act.
References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this announcement. All references to time in this announcement are to London time unless otherwise stated.
